Regulation Best Interest, the long studied and discussed Commission rule that addressed the standards governing broker-dealers when making an investment recommendation was challenged by in a suit filed by seven states and the District of Columbia. State of New York v. SEC, Civil Action No. 1: 19 -cv-0835 (S.D.N.Y. Filed Sept. 9, 2019). The suit claims the SEC’s regulation “increases confusion about the standards of conduct that apply when investors receive recommendations and advice from…

SEC Chairman Jay Clayton called for greater international cooperation in the enforcement of anti-corruption statutes such as the Foreign Corrupt Practices Act in remarks delivered before the Economic Club of New York on September 9, 2019 (here). The comments followed a review of initiatives taken by the Commission under his tenure to aid the main street investor, a key focus of the agency under Chairman Clayton. The FCPA, spawned from corruption uncovered in…

Offering frauds have long been a staple of SEC enforcement. Many of these actions are straight forward, involving the sale of securities for a virtually worthless or non-existent business. Some are Ponzi schemes. Virtually all of these actions promise the investor a safe investment with good to sky-high returns. The SEC’s most recent action in this area is different. It is based on the sale of unregistered securities. The seller is a securities law recidivist…

A look forward; a look back: The future looms as September begins. A Commissioner position will be opening on the SEC. A position is open on the PCAOB. Budget hearings will begin next month on Capitol Hill for the agency following a Congressional hearing at the end of September at which Chairman Clayton and the four Commissioners will testify. Individually, and collectively, these events may bode change for the Securities and Exchange Commission and those…

The Commission’s focus on retail investors has translated into brining increasing numbers of actions against investment advisers. A number of those actions center on fraudulent schemes which were little more than simple theft. Those, and other similar actions typically result in the filing of parallel criminal charges by the U.S. Attorney’s Office. One of those actions is U.S. v. Hafen, (S.D.N.Y. Plea Sept. 4 2019). Ellis H. Hafen was a financial adviser at two investment…

The SEC and the CFTC resolved enforcement actions against the Options Clearly Corporation, imposing $20 million in penalties for regulatory failures. This is the first such actions. It serves to highlight the key financial position of the OCC in the U.S. regulatory system. In the Matter of the Options Clearing Corporation, Adm. Proc. File No. 3-19416 (September 4, 2019); In the Matter of The Options Clearing Corporation, CFTC Docket No. 19-19 (September 4, 2019). The…

A look forward; a look back: As the end of the Government fiscal year loams, the Commission seems to have kicked the case filing machine into gear. Last week the agency filed 15 new cases. While at times the Commission has matched that total, the question here is if that pace continues. If so the stats for new actions might eclipse last year’s total. Cases filed last week included those centered on: Internal controls, pre-release…